Underground Construction - April 2021 - 19

FIGURE 3: UCC Index Companies' Operating Performance & Valuation Metrics
($ in millions)

Enterprise Value /

As of March 15, 2021

Enterprise
Value

LTM
Revenue

LTM
EBITDA

Price/
Earnings

Revenue

LTM EBITDA

Quanta Services, Inc.

$13,538

$11,203

$911

28.9x

1.2x

14.9x

MDU Resources Group, Inc.

$8,635

$5,533

$835

16.2x

1.6x

10.3x

MasTec, Inc.

$8,231

$6,321

$731

22.6x

1.3x

11.3x

Dycom Industries, Inc.

$3,707

$3,199

$297

94.2x

1.2x

12.5x

Primoris Services Corporation

$2,231

$3,491

$250

19.0x

0.6x

8.9x

Granite Construction Incorporated

$1,781

$3,502

$97

-10.7x

0.5x

18.3x

MYR Group Inc.

$1,265

$2,247

$130

21.1x

0.6x

9.7x

Aegion Corporation

$1,091

$808

$86

38.8x

1.4x

12.7x

Aecon Group Inc.

$1,006

$2,860

$84

15.5x

0.4x

11.9x

Infrastructure and Energy Alternatives

$665

$1,753

$123

-177.4x

0.4x

5.4x

Matrix Service Company

$345

$794

$15

-21.9x

0.4x

NM

Median

$1,781

$3,199

$130

19.0x

0.6x

11.6x

Average

$3,863

$3,792

$324

4.2x

0.9x

11.6x

Source: S&P Capital IQ, data as of March 15, 2021; all data is TTM

for homeowners. However, 5.2 percent of
mortgages (2.7 million) are in forbearance
due to governmental limitations on
foreclosures that represents $547 billion
in unpaid principal.
This artiﬁcial decrease in supply and
expected decline in demand, as people
return to the oﬃce and are in less need of
additional rooms to work and play, will
likely see supply increase meaningfully.
FMI also anticipates rates to increase due
to inﬂation pressures in late 2021, early
2022. This will decrease the buying power
of the buyers and put downward pressure
on the prices we are seeing today.
While this primarily impacts the
new construction segments focused on
residential markets, those developments,
new hook-ups and highways that
require relocation of utilities impact the
underground market.

UCCI performance & updates
The Utility & Communications
Construction Index (UCCI) presented
below presents the stock performance of
the sector's publicly traded stocks over
the past quarter and the past year. The
UCC Index will no longer include The
Goldﬁeld Corporation, as it has been
acquired by First Reserve Corporation
in a take-private transaction in the ﬁnal
quarter of 2020.

FIGURE 4: Recent Deal Activity
Announced

Target

Acquirer

Business Description

03/2021

Superior Pipeline Services

Peak Utility Services

Gas & electric T&D

02/2021

Pride Utility Construction

Future Infrastructure

Underground utility services

01/2021

James Power Line

PowerGrid Services

OH/UG power distribution

01/2021

B&B Electrical & Utility

United Utility Services

OH/UG power distribution

12/2020

Pike Corporation

Lindsay Goldberg

Electric T&D

12/2020

Gudenkauf Corporation

Congruex

Communication services

The ﬁrst quarter of 2021 has been
incredible relative to the broader market.
The UCCI is up 30 percent versus 6
percent for the S&P 500. Expectations
for a large infrastructure bill that
moves through Congress to budget
reconciliation is the expectation. We
also have experienced meaningful capital
investment projections from utility,
communication and government entities
expecting a low-rate environment with
ample federal support.
The one-year performance of the UCCI
is up 207 percent over a grisly point as
the pandemic had startled markets and
the sell-off was in full swing. For the
investor that bought at that point, the
UCCI generated returns substantially
above the S&P 500 (increasing 63
percent over the same period).

Mergers & acquisitions
Due to the liquidity in the marketplace and
the anticipation for increases in spending
on power, communication and renewable
infrastructure, deal activity is robust. In
the public markets, we would anticipate
additional shelf oﬀerings (like Primoris
and Orbital Energy Group) to increase
available funds for acquisition activity. In
the private markets, we expect continued
consolidation and diversiﬁcation of
services by incumbents that historically
relied on the oil and gas markets.
The ﬁrst quarter was comprised
primarily of add-ons to existing platforms
except for the majority interest in Pike
taken by Lindsay Goldberg. The Pike
family will remain signiﬁcant shareholders
in the business, but an additional private
equity group entered the infrastructure
services arena. *
UCONonline.com | APRIL 2021

19
http://www.UCONonline.com
Underground Construction - April 2021

Table of Contents for the Digital Edition of Underground Construction - April 2021
